Asian share markets took back some of their earlier gains on Wednesday as investors were unnerved by a drop in US stock futures, underscoring lingering anxiety following steep losses in global equities over the past few days.

Asian share markets took back some of their earlier gains on Wednesday as investors were unnerved by a drop in US stock futures, underscoring lingering anxiety following steep losses in global equities over the past few days.

While most analysts believed distressed selling looked to have run its course for the moment, allowing volatility to abate a little, the prospect of monetary tightening across the globe remained a challenge for the long term.

“If we look at some of the drivers of the recent volatility – the natural correction and the bond sell-off – we don’t foresee any of these factors contributing to a lengthy period of extreme volatility,” said Tom Kenny, senior economist at ANZ.

“The correction is probably a healthy development and is not reflective of a souring of the macroeconomic outlook.”

Investors took their cue from a late rebound on Wall Street, though many had an anxious eye on E-Mini futures for the S&P 500 which were off 0.3 percent in Asian trading.

MSCI’s broadest index of Asia-Pacific shares outside Japan was last up 0.8 percent after rising as much as 2 percent in early trades.

Japan’s Nikkei eased too but was still up 1.6 percent. Chinese blue chips fell more than 1 percent while South Korea’s KOSPI index was also in the red.

“The only surprise about the current volatility is that it hasn’t happened sooner. Normally, even in a bull market, investors should expect a sell-off of 10-percent-plus at some point,” said Richard Titherington, chief investment officer of EM Asia Pacific Equities at J.P. Morgan Asset Management.

“While a major market downturn is possible, it is not our current expectation. The underlying backdrop of an improving global economy, a weakening US dollar and a pickup in global earnings all remain supportive factors.”

It was also a wild ride for Treasuries, with U.S. 10-year yields diving as deep as 2.65 percent before a fresh sell-off dragged them back up to 2.80 percent - the sort of range seen very rarely.

Bonds had started to see some buying again, a hint that risk appetite might be returning with the potential to trigger another spasm of selling in stocks.